Nov. 30 (Bloomberg) -- Egypt’s main Islamist group claimed
an early lead as officials counted ballots from parliamentary
elections that offer the first test of the parties competing to
run the country after the fall of Hosni Mubarak.

Mohammed el-Beltagy, an official at the Freedom and Justice
Party set up by the Muslim Brotherhood, said the party may have
won at least 40 percent of votes counted so far. The party
confirmed the figure in an e-mailed statement late today. The
first of three stages of parliamentary voting, covering about a
third of the country, ended yesterday with officials and rights
groups citing a higher-than-expected number of voters and little
violence. Results will be announced late tomorrow, state
television said.

“We were pleasantly surprised by the voter turnout, which
appeared to be very large, and also by the diligence of election
officials,” said Robert Becker, political party trainer for the
Washington-based National Democratic Institute, a non-profit
organization. “At the same time, we witnessed a lot of
shortcomings, and a number of violations, and these are things
we hope can be fixed in the coming rounds of voting.”

The run-up to the election was marred by a week of clashes
between security forces and protesters that left 43 people dead.
Demonstrators accuse the ruling generals of stifling freedoms
while failing to restore security or revive an economy growing
at the slowest pace in more than a decade.

Balloting in Egypt’s 18 remaining provinces will take place
in two further rounds, with final results due by Jan. 13.

Stocks Surge

The benchmark stock index extended gains today after
surging the most in almost two years as investors welcomed the
largely peaceful vote. Yields in the nation’s first sale of
dollar-denominated treasury bills yesterday were lower than
expected as the government raised $1.53 billion.

In most constituencies, more than half of the votes have
been counted, el-Beltagy said in a phone interview today. The
Freedom and Justice Party said in an e-mailed statement that it
is leading the count, followed by the Salafi Nour Party, a more
conservative Islamic group, and then the secular Egyptian Bloc.

“The Egyptians have spoken and have chosen freely,” Essam
al-Erian, deputy head of the Freedom and Justice party, said
today on his Twitter account. “Everyone must respect the will
of the people.”

Tahrir Vigil

Protests demanding an end to army rule continued throughout
the voting and ballot count, with demonstrators maintaining a
vigil after dark in Cairo’s Tahrir Square today. Protesters
staged a sit-in outside the Cabinet building in central Cairo,
banging on drums and chanting “Down with military rule!” The
army says it won’t cede power before presidential elections due
by the end of June.

“We will continue to protest until we’re sure that the
military council is no longer ruling this country,” said Yamen
Hazem, 28. “I don’t agree with holding a vote under a
government that has no powers. No one can guarantee that there’s
no rigging.”

Becker said members of his organization had witnessed
“instances of what we call assisted voting, with party agents
helping people to fill in their ballots,” as well as
campaigning outside polling stations, something banned under
Egypt’s electoral law. “It’s partly subjective, in many cases
it was the only guidance voters were getting, but when party
campaigners start going inside the station, that’s a clear
violation,” he said today by telephone.

Voting Preparations

Other concerns include a lack of privacy for voters in many
polling stations and the late opening of some venues due to poor
preparation, said Becker. “Traditionally voter turnout is
higher in the rural provinces than in Cairo, so the authorities
have to be prepared for a very high turnout in the next two
rounds,” he said.

The EGX 30 stock index added 0.8 percent at the close in
Cairo after jumping 5.5 percent yesterday as the high turnout
and absence of violence boosted expectations that the vote will
help ease tensions and smooth the transition to democratic rule.
The government sold one-year dollar notes to yield 3.87 percent,
compared with the 5.25 percent median estimate in a Bloomberg
survey of seven analysts.

Still, the EGX 30 is down 44 percent this year, and the
yield on dollar bonds due April 2020 jumped to 7.03 percent
today, the highest since January, as the unrest hurts Egypt’s
economy. Tourists have shunned the country and industrial
production has been hit by strikes. Gross domestic product grew
1.8 percent in the fiscal year through June, the slowest in at
least a decade.

Name-Recognition

The Muslim Brotherhood, banned under Mubarak, was founded
in 1928 and its experience, organizational skills, support
networks and name-recognition have given it an edge over the
secular youth who were at the forefront of the leaderless anti-Mubarak revolt. Islamist groups have already won elections in
Morocco and Tunisia, where the region’s wave of uprisings began
a year ago.

“It’s only normal for the Freedom and Justice Party to be
in the lead,” said Samer Soliman, an assistant professor of
political economy at the American University in Cairo who’s also
a member of one of the parties that make up the main secular
bloc contesting the vote. “It has long years of political and
election experience under its belt and has abundant human and
financial resources. The main issue in the vote was the
relationship between state and religion.”